How to Invest in Renewable Energy

Renewable Energy symbols

Renewable energy is no longer a science fiction phenomenon. It is reality. In fact, if you drive down any residential street in the UK or Europe for that matter you will notice that nearly every second house on the street has a solar panel on the roof. If you happen to be taking a drive through the countryside it is very likely that you will be able to spot a dozen or so large wind turbines on the horizon. This is no longer fiction, it is reality.

There are 5 different ways of investing in Renewable Energy:

  1. Stocks

There are several good long term stock choices for renewable energy investing, but choose wisely as with any stock it is linked to the overall economic environment. Some good picks are GE, Siemens, Tesla or a lithium mining company which supplies battery manufactures can be a good gamble if you are willing to take a risk.

2. Green Bonds

Investing in bonds which are focused on green energy stocks is a good way to spread your risk by investing in a number of companies and enterprises that are included in the bond, however the returns tend to be in the small single digits and fixed over the long term.

3. Crowdfunding

Crowdfunding is an upcoming alternative for those who want to have a more hands-on investment approach, it is definitely more alternative than stocks and bonds, and crowdfunding as a concept can be more risky overall. Very often there are local companies looking to raise investor funds to get a renewable energy project off the ground, check with your local broker or online bulletin board.

4. Start-up Capital/Short term financing

This type of financing tends to be for new start-up businesses without any proven record. The money can be used for office space, payroll, software development or any other typical funding required for a new company to get its project off the ground. It is certainly viewed as being the riskier option available.

5. Direct ownership of Renewable energy projects

As with all investments there are two key things to consider when investing. One is your tolerance for risk and secondly how long you want to invest for, short, medium or long-term. A direct ownership option, where you invest a fixed sum of money over a set period of time and receive a percentage of the profits on an annual basis can be one of the best ways to get involved in a renewable energy project. Usually there is a management company put in place to manage all of the running of the project so you can just sit back and watch the money roll in.


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